Diffusion Engineers IPO opens today: Pros and cons

Published: 26th Sep 2024

By: Value Research

About the company

Diffusion Engineers manufactures welding consumables, wear plates, and heavy engineering equipment. These products are used across the power, cement, mining, oil, and sugar industries. The company operates four facilities in Maharashtra.

Total IPO size (Rs cr) 158   Offer for sale (Rs cr) -   Fresh issue (Rs cr) 158   Price band (Rs) 159 -   168   Subscription dates September   26, 27 and 30, 2024   Purpose of issue Capital   expenditure

IPO details

629   Net worth (Rs cr) 349   Promoter holding (%) 69.7   Price/earnings ratio (P/E) 20.4   Price/book ratio (P/B) 1.8M-cap (Rs cr)

Post-IPO

2Y CAGR (%) FY24 FY23 FY22   Revenue 16.5 278 259 205   EBIT 35.7 35 27 19   PAT 35 31 22 17   Net worth 191 142 121   Total debt 34 48 25Key financials (Rs cr)

Financial history

3Y average FY24 FY23 FY22   ROE (%) 16.8 18.5 16.9 15.1   ROCE (%) 18.8 20.6 18.5 17.3   EBIT margin (%) 10.8 12.6 10.4 9.3   Debt-to-equity 0.2 0.2 0.3 0.2Ratios

Key ratios

The pros

Diffusion Engineers served over 500 clients in FY24, with 69 per cent maintaining at least five-year partnerships. Its multi-industry presence ensures revenue diversification, as top 10 clients account for only 29 per cent of FY24 revenue.

The cons

Diffusion Engineers faces geographic concentration risk. It's also heavily dependent on industrial sector growth. For our in-depth risk report, click the link below:

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